Poor prognosis for San Francisco health clinics

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Family nurse practitioner Kristen Peek listens to the heart of 48-year-old John Chandler Jr. during a follow-up appointment at the St. Anthony's Foundation Clinic in the Tenderloin.

The recent closure of Tenderloin Health, which served the neighborhood’s homeless and uninsured population, might only be the tip of the iceberg when it comes to free clinics shutting their doors.

Some public health experts have been optimistic that the trend of health clinics consolidating or closing because of the growing gap between the number of uninsured clients and funding would stop under national health care reform that takes effect in 2014. But after digging into Gov. Jerry Brown’s proposed budget, others fear the situation could worsen before it improves.

“What we’re seeing with Tenderloin Health could be just a little crack in the dam,” said Ana Valdes, who runs the St. Anthony Foundation’s clinic. “If the governor has his way, that dam could break open.”

The governor’s proposed budget would eliminate the prospective payment system, which reimburses federally approved nonprofit community health centers, and replace it with a bundled payment system, which makes installment reimbursements per patient. The details of how reimbursement rates would change are not clear, but the shift accounts for $55 million in savings in next year’s budget.

Public health cuts in the proposed budget come after years of dwindling resources, clinic directors said.

“It’s kind of like being nibbled to death,” said Vitka Eisen, CEO of Haight Ashbury Free Clinics and Walden House, two clinics that merged in July partly in response to the Free Clinics’ financial woes. “It’s not one dramatic hit, but over time there are reductions and it begins to have effects.”

During the past three years, 12 clinics across the state have closed primarily because of financial strain, according to Carmela Castellano, president of California Primary Care Association.

The $55 million cut this year could be the blow that knocks out even more clinics, leaving few in 2014 to treat newly insured, low-income patients, Castellano said.

“This could have a significantly destabilizing effect on the clinics and significantly undermine our ability to step up and play that role,” she said.

Castellano said the association and other advocacy organizations are working to revise that provision before the budget is approved.